Image Source: Politico.
Even before taking office, the expansionist insinuations of the recent remarks by U.S. President Donald Trump regarding Panama, Canada, and Greenland have raised apprehensions over the approach the second administration will adopt toward the Western Hemisphere. On his inauguration day, January 20th, he issued an executive order renaming the Gulf of Mexico for Gulf of America to “honor American greatness.” This potential reimplementation and modification of the 1823 Monroe Doctrine reflects Washington’s perceived right to annexation for national security purposes, encapsulating Trump’s “America First” maxim. Such rhetoric and early actions hint at the possible emergence of a new foreign policy guide for Latin America – a region shaped by U.S. dominance aimed at securing its regional hegemony. This rise of what could be termed the “Trump Corollary” raises the question: Will Panama serve as the stage for its inauguration?
What the first Trump administration told us
Trump’s first administration significantly heightened its assertiveness toward Beijing’s economic influence in Latin America. This marked a stark departure from Obama’s approach, which sought – with limited success – to foster Confianza (trust) and reset U.S. relations with the region. Instead, Trump framed Chinese engagement in Latin America as the root of Washington’s problems with its neighborhood. This perspective was repeatedly articulated by U.S. senior officials, including both National Security Advisors Robert O’Brien, describing China as “a more capable competitor than the Soviet Union at its height,” and John Bolton, who declared “The destinies of our nations will not be dictated by foreign powers […] Today, we proudly proclaim for all to hear: the Monroe Doctrine is alive and well.”
Venezuela was a focal point of Trump’s first term policy towards Latin America. Regarded as a regional hub for Washington’s adversaries since the Hugo Chávez era, bilateral tensions reached a turning point during the leadership of Maduro and Trump. Viewed increasingly as falling under China’s influence, allegations emerged following Caracas’ acquisition of Chinese military equipment – ranging from K-8 jets to JYL-1 radar systems – and China’s imports of Venezuelan hydrocarbons, which provided an economic lifeline to the Maduro regime. Unilaterally, Washington intensified economic sanctions to enforce regime change in Caracas – thereby deepening Venezuelan trade dependency on China – while offering little support to Juan Guaidó, the leader of the Venezuelan opposition. Multilaterally, Trump shunned the Lima Group – an intra-hemispheric bloc comprised of Canada and Latin American states such as Brazil, Chile, Colombia, Panama – established in 2017 to address the Venezuela political crisis. Likewise, he demonstrated minimal interest in the Pacific Alliance and Prosur as a free trade-focused institution that excluded Venezuela. Arguably, given these institutions’ liberal-democratic orientation, they could serve as channels for Washington to revitalize its hegemonic leadership within the Western Hemisphere.
This approach not only disregarded regional perceptions of the United States’ complacency but also overlooked several opportunities to engage with regional partners that were more than willing to side with the White House. For instance, former Brazilian President Jair Bolsonaro – often regarded as the “Trump of the Tropics” – felt compelled to abandon his initial anti-China stance to a more pragmatic approach towards Beijing, as the U.S. felt short on delivering benefits reserved to its more aligned regional partners. Likewise, Trump could not find support from center-right Chilean President Sebastián Piñera, who admittedly had “many disagreements with President Trump” regarding protectionism and the China-U.S. Trade War. Concerning neighboring Mexico, Trump’s agenda was characterized by a hardline immigration policy and a revised NAFTA agreement to protect the U.S. manufacturing sector.
Overall, what became evident during the first Trump administration was that Latin America was perceived as a potential security liability to the U.S., one best managed by isolation, epitomized by a proposed border wall. Unsurprisingly, this approach undermined much of Washington’s influence and leadership image in the region, as evidenced by its inability to garner regional support for its position on the war on Ukraine at the UN and the OAS.
The Panamanian Déjà Vu
The Panama Canal episode stands as one of the earliest demonstrations of the United States’ capacity to shape the course of history in Latin America, serving as a foundational base for the notorious Roosevelt Corollary a year after. Bolstered by the belief that America is destined to lead, Washington supported Panamanian separatists after Colombia rejected the U.S. proposal for a land lease for the canal across the Isthmus in 1903. Within weeks after securing Panama’s independence – rapidly recognized by the U.S. – the newly formed government signed the Hay-Bunau-Varilla Treaty, granting rights to build the Canal and recognized Panama as a U.S. protectorate, a status that, in the words of U.S. Secretary of War Elihu Root, “requires us [the U.S.] to police the surrounding premises.” Since then, the Panama Canal has served as a cornerstone of U.S. hemispheric hegemony.
In 1977, the Torrijos-Carter Treaties outlined the gradual transfer of control over the Canal to the Panamanian government. These treaties included vital components, such as the Neutrality Treaty, which preserved U.S. rights to apply military force against foreign powers that sought to block the Canal. However, as explained by Carter’s National Security Advisor, Zbigniew Brzezinski, if Panama decided to close the Canal, “according to the Neutrality Treaty, we [the U.S.] will move in and close down the Panamanian government for repairs.” The Operation Just Cause episode in 1989, comprising a large-scale military operation to topple General Manuel Noriega’s regime, attested to the extent of Washington’s power projection to safeguard its interests in Panama. The transfer was completed in 1999 alongside the withdrawal of U.S. military forces stationed in Panama.
Who Controls the Isthmus, Controls the Hemisphere
Chinese presence surrounding the Canal first raised alarms in Washington when Hong Kong-based Hutchinson Whampoa – believed to share close affiliations with the “inner circle of Beijing’s ruling elite” – acquired two Panamanian ports at both sides of the Canal in 1999 through an auction, the Balboa and Cristóbal Ports. However, since then-President Bill Clinton believed “Communist China is our [U.S.] strategic partner,” the acquisition was not considered a national security threat. Undeniably, opinions within the White House have changed dramatically since then. It was not the Canal’s “exorbitant” transit fees that have prompted Trump’s intentions to review the Carter-era decision, but allegedly the Chinese People’s Liberation Army (PLA) “operating in the Panama Canal,” a claim included in his 2024 ‘Merry Christmas’ message.
Following the establishment of Panama-China diplomatic relations in 2017, Beijing has cemented its position as Panama’s main trade partner, responsible for one-sixth of its total exports. According to the China Index, Panama is the second Latin American country most influenced by the Chinese government (surpassed only by Peru). This influence stems from strategic infrastructure projects linked to the Canal, mining sector, finance, and logistics, often within the Colón Free Zone. For instance, within the free-trade zone, the Chinese-based Landbridge Group acquired Panama’s largest port in 2016, the Atlantic side Margarita Island. This deep-water port has also undergone an infrastructure expansion project by the China Communications Construction Company (CCCC), which has also invested in similar initiatives in the South China Sea, enhancing Margarita’s cargo handling capacity. Likewise, the CCCC and the China Harbor Engineering Company (CHEC) secured the contract for building the Canal’s fourth bridge in 2018, not to mention energy-related infrastructure, proposals that chime well with the broader logistical and strategic interests of China’s Belt and Road Initiative in Latin America.
This underscores the Panama Canal’s central role in the broader and intensifying tension between China and the US regarding Beijing’s port infrastructure in Latin America. Critically, Chinese presence at the Isthmus holds significant geostrategic implications, as the PLA Navy emphasizes “offshore waters defense” and “open seas protection” within its strategic military guidelines. In November 2024, Chinese President Xi Jinping attended the inauguration of the Chancay port in Peru, built by China-based Cosco Shipping Ports, integrated within the “21st century maritime Silk Road.” According to former SOUTHCOM Commander Laura Richardson, these infrastructure projects could undermine U.S. sovereignty, as “they are on the 20-yard line to our [U.S.] homeland.”
Under a great power conflict scenario, Chinese-financed ports in Latin America could be repurposed for military use, such as harboring PLA Navy warships and submarines. This strategic positioning could facilitate the blockade of the Panama Canal, significantly delaying the U.S. Navy’s transfer to the Pacific theater while also undermining U.S. military response in the Western Hemisphere. Consequently, under Trump’s interpretation, the potential for Beijing to leverage its influence to control Panama’s waterway passage could serve as enough motivation for Washington to “demand that the Panama Canal be returned to the United States of America. In full, quickly and without question.” Crucially, the use of military force has not been ruled out to date.
However, Panama has not overlooked the security implications of these strategically sensitive projects and cooperation with China. For example, former President Laurentino Cortizo halted, canceled, and postponed several initiatives, including the fourth bridge, the Margarita Island port, and the bullet train proposal. Likewise, concerns about the lack of transparency regarding operations inside Chinese-controlled terminals have been voiced by Panamanians, particularly about the Balboa port, which is located just a few kilometers away from the Noel Rodriguez Naval Base. These concerns highlight the growing public awareness regarding the complex Panama-China-U.S. triangular relations.
Nevertheless, none of these initiatives generated the same level of concern and negative reaction as Trump’s proposal to retake control of the Canal. As a response, Panamanian President José Raúl Mulino firmly stated “every square meter of the Panama Canal and its adjoining zone is Panama’s and will remain so,” also reaffirming that “neither China, the European Community, the United States nor any other power” has control over the Canal. Furthermore, as Ricaurte Vásquez Morales, the Administrator of the Panama Canal Authority, explained, discriminating against any nation or granting preferential treatment to the U.S. would violate the Neutrality Treaty established by the Carter-Torrijos agreements in 1977.
Trump has already nominated the new U.S. ambassador to Panama, Kevin Marino Cabrera, who is expected to “do a fantastic job representing our Nation’s interests in Panama,” and thus likely to push forward Washington’s demands over the Canal. Further pressures by the incoming Trump administration on Panama are likely to be met with negative reactions from other Latin American states, as Mexico, Chile, Bolivia, and Venezuela have all affirmed their solidarity with Panamanian sovereignty. Such assertive behavior could not only push the region further away from Washington but also towards China.
A New Corollary for a New Great Power Competition
Under Trump, Washington showed little desire to lead – and even fewer intentions to bear the costs of regional leadership – while simultaneously rejecting the notion of allowing other great powers to fill the vacuum. In this context, a Trump Corollary is likely to be formulated to counter Chinese influence in Latin America, not out of a commitment to maintaining the United States’ historical role as the Western Hemisphere hegemon, but because such influence could pose a security liability to the U.S. This hint was encapsulated by Trump’s statement regarding the relations with Latin America and Brazil on his inauguration day, when he declared, “We don’t need them. They need us. Everybody needs us.” This was also evidenced by Trump’s nomination of Republican Senator Marco Rubio as Secretary of State. Rubio, the son of Cuban immigrants, has been a vocal critic of China’s presence in Latin America and the Maduro regime in Venezuela for years. Therefore, Rubio is expected to play a pivotal role in advancing Trump’s refocused agenda toward Latin America. During his hearing before the U.S. Senate Committee on Foreign Relations on January 15, Rubio highlighted that “the terms under which that [Panama] canal was turned over have been violated” while expressing his apprehension over Chinese-linked companies’ “ability to turn the canal into a choke point in a moment of conflict,” statements that are aligned closely with Trump’s views.
Crucially, this approach towards Panama could set precedents for revising agreements between previous U.S. administrations and Latin American states. The U.S. withdrawal from international arrangements, such as the Trans-Pacific Partnership (TPP) and the Paris Agreement, during the previous Trump administration evidence that Washington could nullify or renegotiate existing treaties considered disadvantageous to protect U.S. interests. Critically, the intensification of the China-U.S. strategic competition could make Washington overlook its respect for state sovereignty within the Western Hemisphere, particularly if the White House believe that its zone of influence is falling under the influence of a competing great power, an approach observed during the Cold War to “prevent another Cuba.” Furthermore, such a stance is likely to impact regional countries’ decisions regarding their current and future cooperation with Beijing, as uncertainty over Washington’s potential reaction looms. On one hand, this could serve Washington’s strategic purposes by exerting pressure on Latin America, but on the other hand, it could further alienate the region from its sphere of influence. Hence, it seems that the future of Washington’s influence over Latin America might be held by an “isthmus.”
Mateus Bilhar is a PhD Candidate in International Relations at Nankai University, China. His research scope includes China-Latin America relations, with particular focus China-Brazil relations and South America’s reactions to the Sino-U.S. peer competition, and hedging in IR.